Chinese spirits, or Baijiu, is a traditional distilled spirit in China which has a relatively high alcohol content. It is very important in Chinese culinary culture. High-end Chinese spirits are served in official or business banquets. They are also popular gifts for relatives, friends or business partners. In recent years, although Chinese spirits have been overshadowed by other liquors, such as wine, they will remain as a major variety of alcoholic beverages in China in the foreseeable future.

According to CRI, from 2005 to 2012, the production volume, sales volume and sales price of Chinese spirits kept rising. The profitability of the industry strengthened significantly. Some national famous brands, such as Moutai and Wuliangye, as well as regional famous brands, reinforced their product structure adjustment, marketing network development and advertizing activities. Since 2013, the growth of China’s economy has been slowing down and so has that of the Chinese spirits industry. On the other hand, stronger purchasing power and higher consumption standards of Chinese consumers have driven the demand for mid- to- high-end Chinese spirits up. The consumption is transiting from mid- to- low-end Chinese spirits to mid- to high-end ones.

In 2016, the production volume of Chinese spirits was 13,583,600 kiloliters, increasing by 3.23% YOY. By contrast, the production volumes of beer and wine both declined, demonstrating the advantage of Chinese spirits among its liquor competitors.

Consumption is upgrading in China. Younger consumers attach more importance to health. Due to high alcohol content, drinking too much Chinese spirits will harm consumers’ health. The trend for Chinese spirits is towards less strong products.